The decision to this effect was taken at a cabinet meeting presided by Chief Minister Sheila Dikshit.
"We will give Rs two lakh each to both the families," Dikshit said.
Ranjit Singh and his younger brother Sita Singh had lost their lives when a former US soldier opened fire in the gurudwara in Wisconsin on last Sunday, in a case of hate crime. Families of both Ranjit and Sita live in Chand Nagar area of Vishnu Garden in West Delhi.
Dikshit said Delhi Government will also take care of education of the children of both the families. The victims were the only earning members of their families.
Education Minister Arvinder Singh Lovely, who had visited the families last week, said wives of both Ranjit and Sita Singh will be provided job by Delhi Sikh Gurudwara Prabandhak Committee.
Ranjit had left for the US 16 years ago when his son was just seven months old and had not visited India since then. His family said he was planning to visit the family this Diwali.